EXHIBIT 4.1

                     SHAREHOLDER PROTECTION RIGHTS AGREEMENT

      This SHAREHOLDER  PROTECTION RIGHTS AGREEMENT  ("Agreement"),  dated as of
April 20, 2001,  between Anaren  Microwave,  Inc., a New York  corporation  (the
"Company"),  and American Stock  Transfer & Trust Company,  as Rights Agent (the
"Rights Agent," which term shall include any successor Rights Agent hereunder).

      WHEREAS,  the Board of  Directors  of the Company has (a)  authorized  and
declared a dividend  of one right  ("Right")  in respect of each share of Common
Stock (as  hereinafter  defined)  held of record as of the close of  business on
April 27, 2001 (the "Record  Time") and (b) authorized the issuance of one Right
in respect of each share of Common  Stock issued after the Record Time and prior
to the Separation Time (as hereinafter defined);

      WHEREAS,  each Right  entitles the holder  thereof,  after the  Separation
Time, to purchase  securities of the Company (or, in certain  cases,  of certain
other  entities)  pursuant to the terms and subject to the  conditions set forth
herein; and

      WHEREAS,  the Company desires to appoint the Rights Agent to act on behalf
of the Company,  and the Rights Agent is willing so to act, in  connection  with
the issuance,  transfer,  exchange and  replacement of Rights  Certificates  (as
hereinafter  defined),  the  exercise  of Rights and other  matters  referred to
herein;

      NOW  THEREFORE,  in  consideration  of the  premises  and  the  respective
agreements set forth herein, the parties hereby agree as follows:

<PAGE>

                                    ARTICLE I
                               CERTAIN DEFINITIONS

      1.1 Certain  Definitions.  For purposes of this  Agreement,  the following
terms have the meanings indicated:

      "Acquiring  Person"  shall  mean  any  Person  who or  which  shall be the
Beneficial Owner of 20% or more of the shares of Common Stock then  outstanding,
but shall not include an Exempt Person; provided, however, that (i) if the Board
of  Directors  of the Company  determines  in good faith that a Person who would
otherwise be an "Acquiring Person" became such inadvertently (including, without
limitation,  because:  (A) such Person was unaware that it beneficially  owned a
percentage  of Common  Stock that  would  otherwise  cause such  Person to be an
"Acquiring Person;" or (B) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual  knowledge  of the  consequences  of
such  Beneficial  Ownership  under this  Agreement) and without any intention of
changing or influencing  control of the Company,  and if such Person as promptly
as  practicable  divested  or  divests  itself  of  Beneficial  Ownership  of  a
sufficient  number of shares of Common Stock so that such Person would no longer
be an "Acquiring  Person," then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement;  (ii) if, as of
the date hereof, any Person is the Beneficial Owner of 20% or more of the shares
of Common Stock  outstanding,  such Person shall not be or become an  "Acquiring
Person"  unless and until such time as such Person shall  become the  Beneficial
Owner of additional shares of Common Stock (other than pursuant to a dividend or
distribution  paid or made by the  Company on the


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<PAGE>

outstanding  Common  Stock in shares of Common  Stock or  pursuant to a split or
subdivision  of  the  outstanding  Common  Stock),  unless,  upon  becoming  the
Beneficial Owner of such additional  shares of Common Stock,  such Person is not
then the  Beneficial  Owner of 20% or more of the  shares of Common  Stock  then
outstanding;  and (iii) no Person  shall  become an  "Acquiring  Person"  as the
result of an  acquisition  of shares of Common  Stock by the Company  which,  by
reducing the number of shares outstanding  increases the proportionate number of
shares of Common Stock  beneficially  owned by such Person to 20% or more of the
shares of Common Stock then  outstanding,  provided,  however,  that if a Person
shall become the  Beneficial  Owner of 20% or more of the shares of Common Stock
then  outstanding by reason of such share  acquisitions by the Company and shall
thereafter  become the Beneficial Owner of any additional shares of Common Stock
(other than pursuant to a dividend or  distribution  paid or made by the Company
on the outstanding Common Stock in shares of Common Stock or pursuant to a split
or  subdivision  of the  outstanding  Common  Stock),  then such Person shall be
deemed to be an "Acquiring  Person" unless upon becoming the Beneficial Owner of
such additional shares of Common Stock such Person does not beneficially own 20%
or more of the shares of Common Stock then outstanding.

      "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such Rule
is in effect on the date of this Agreement.

      A Person shall be deemed the "Beneficial  Owner," and to have  "Beneficial
Ownership" of, and to "Beneficially Own," any securities as to which such Person
or any of such


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<PAGE>

Person's Affiliates or Associates is or may be deemed to be the beneficial owner
pursuant to Rules 13d-3 and 13d-5 under the Securities  Exchange Act of 1934, as
such  Rules  are in  effect  on the  date  of  this  Agreement,  as  well as any
securities  as to  which  such  Person  or any of such  Person's  Affiliates  or
Associates  has the right to become  Beneficial  Owner  (whether  such  right is
exercisable  immediately  or only  after the  passage of time)  pursuant  to any
agreement,  arrangement  or  understanding,  or upon the exercise of  conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise;  provided, however, that a Person shall not be deemed the "Beneficial
Owner," or to have  "Beneficial  Ownership"  of, or to  "Beneficially  Own," any
security (i) solely because such security has been tendered pursuant to a tender
or exchange  offer made by such  Person or any of such  Person's  Affiliates  or
Associates  until such  tendered  security is accepted  for payment or exchange,
(ii) solely because such Person or any of such Person's Affiliates or Associates
has or shares the power to vote or direct the voting of such  security  pursuant
to a revocable proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance  with, the applicable  rules and regulations
under  the  Securities  Exchange  Act of  1934,  except  if such  power  (or the
arrangements  relating  thereto) is then reportable under Item 6 of Schedule 13D
under  the  Securities  Exchange  Act of 1934  (or any  similar  provision  of a
comparable  or  successor  report),  (iii)  solely  because  of the grant by the
Company to such  Person,  in  connection  with the  execution of an agreement to
acquire the  Company,  of options to acquire  such  security or (iv) held for or
pursuant to the terms of any employee stock ownership or other employee  benefit
plan of the Company or a majority-owned  Subsidiary of the Company. For purposes
of this Agreement,  in determining  the percentage of


                                      -4-
<PAGE>

the  outstanding  shares of Common  Stock with  respect to which a Person is the
Beneficial  Owner,  all shares as to which such Person is deemed the  Beneficial
Owner shall be deemed outstanding.

      "Business  Day" shall mean any day other than a Saturday,  Sunday or a day
on which banking  institutions in The State of New York are generally authorized
or obligated by law or executive order to close.

      "Close of  Business"  on any given  date  shall mean the time on such date
(or,  if such  date is not a  Business  Day,  the  time on the  next  succeeding
Business  Day) at which the offices of the  transfer  agent for the Common Stock
(or, after the  Separation  Time, the offices of the Rights Agent) are closed to
the public.

      "Common  Stock" shall mean the shares of Common Stock,  par value $.01 per
share, of the Company.

      "Exchange  Time"  shall mean the time at which the right to  exercise  the
Rights shall terminate pursuant to Section 3.1(c) hereof.

      "Exercise  Price" shall mean, as of any date,  the price at which a holder
may purchase the  securities  issuable upon  exercise of one whole Right.  Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $170.00.

      "Expiration  Time" shall mean the earliest of (i) the Exchange Time,  (ii)
the Redemption Time and (iii) the close of business on April 27, 2011.

      "Flip-in  Date"  shall  mean any Stock  Acquisition  Date which is not the
result of a Flip-over Transaction or Event.


                                      -5-
<PAGE>

      "Flip-over  Stock" of any Person shall mean the capital  stock (or similar
equity  interest)  with the greatest  voting power in respect of the election of
directors  (or similar  persons  responsible  for  direction of the business and
affairs)  of such  other  Person  or, if such other  Person is a  Subsidiary  of
another  Person,  the  Person  or  Persons  which  ultimately   control(s)  such
first-mentioned Person.

      "Flip-over  Transaction  or Event" shall mean a  transaction  or series of
transactions  after the time when an  Acquiring  Person has become an  Acquiring
Person in which, directly or indirectly,  (i) the Company shall consolidate with
or shall merge into any other Person,  (ii) any Person shall merge with and into
the Company and the Company shall be the continuing or surviving  corporation of
such merger and, in connection with such merger, all or part of the Common Stock
shall be changed into or exchanged  for stock or other  securities  of any other
Person (or of the Company) or cash or any other  property,  or (iii) the Company
shall sell or otherwise  transfer (or one or more of its Subsidiaries shall sell
or otherwise  transfer),  in one or more transactions,  assets or earnings power
aggregating  50% or more of the assets or earning  power of the  Company and its
Subsidiaries  (taken as a whole) to any other Person  (other than the Company or
one or more wholly  owned  Subsidiaries  of the  Company).  For  purposes of the
foregoing  description,  the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates (other than the Company, a wholly owned
Subsidiary  of the  Company or an employee  stock  ownership  or other  employee
benefit  plan of the  Company  or a wholly  owned  Subsidiary  of the  Company),
counted together as a single Person.


                                      -6-
<PAGE>

      "Market  Price"  per share of any  securities  on any date  shall mean the
average of the daily closing prices per share of such securities  (determined as
described  below)  on  each  of the 20  consecutive  Trading  Days  through  and
including the Trading Day immediately  preceding such date;  provided,  however,
that if an event of a type  analogous to any of the events  described in Section
2.4 hereof  shall have caused the closing  prices used to  determine  the Market
Price on any Trading Days not to be fully  comparable  with the closing price on
such date,  each such closing price so used shall be  appropriately  adjusted in
order to make it fully  comparable  with the  closing  price on such  date.  The
closing  price per share of any  securities  on any date  shall be the last sale
price or,  in case no such sale  takes  place or is  quoted  on such  date,  the
average of the closing bid and asked  prices for each share of such  securities,
in either case as reported on the Nasdaq  National  Market or, if the securities
are not reported on the Nasdaq  National  Market,  as reported in the  principal
consolidated  transaction  reporting system with respect to securities listed on
the principal national securities exchange on which the securities are listed or
admitted to trading or, if the  securities are not listed or admitted to trading
on any national securities exchange,  as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other system then in
use,  or, if on any such date the  securities  are not  listed  or  admitted  to
trading on any national  securities exchange or quoted by any such organization,
the average of the closing bid and asked prices as  furnished by a  professional
market  maker  making  a  market  in the  securities  selected  by the  Board of
Directors  of the  Company;  provided,  however,  that if on any  such  date the
securities  are not listed or  admitted  to  trading  on a  national  securities
exchange or traded in the  over-the-counter  market, the closing


                                      -7-
<PAGE>

price per share of such  securities  on such date  shall mean the fair value per
share of  securities  on such date as  determined  in good faith by the Board of
Directors  of the  Company,  after  consultation  with a  nationally  recognized
investment banking firm, and set forth in a certificate  delivered to the Rights
Agent.

      "Person" shall mean any individual, firm, partnership,  association, group
(as such term is used in Rule 13d-5 under the  Securities  Exchange Act of 1934,
as such Rule is in effect on the date of this  Agreement),  corporation or other
entity.

      "Redemption  Price"  shall mean an amount  (calculated  to the nearest one
one-hundredth  of a cent)  equal to the  Exercise  Price,  as in  effect  at the
Redemption Time, divided by 170,000 (i.e., initially $0.001).

      "Redemption  Time" shall mean the time at which the right to exercise  the
Rights shall terminate pursuant to Section 5.1 hereof.

      "Separation  Time"  shall mean the close of business on the earlier of (i)
the tenth day (or such later date as the Board of  Directors  of the Company may
from time to time fix by resolution  adopted prior to the  Separation  Time that
would  otherwise have  occurred)  after the date on which any Person (other than
the Company,  a  majority-owned  Subsidiary of the Company or an employee  stock
ownership  or other  employee  benefit  plan of the Company or a  majority-owned
Subsidiary  of the  Company)  commences a tender or  exchange  offer  which,  if
consummated, would result in such Person's becoming an Acquiring Person and (ii)
the Flip-in Date; provided that, if the foregoing results in the Separation Time
being prior to the Record Time, the Separation Time shall be the Record Time and
provided further that, if any tender or


                                      -8-
<PAGE>

exchange  offer  referred  to in clause  (i) of this  definition  is  cancelled,
terminated or otherwise withdrawn prior to the Separation Time, such offer shall
be deemed, for purposes of this definition, never to have been made.

      "Stock Acquisition Date" shall mean the first date of public  announcement
by the  Company (by any means) or by an  Acquiring  Person (by means of filing a
Schedule 13D under the  Securities  Exchange Act of 1934 (or any  comparable  or
successor report or schedule) or an amendment  thereto) that an Acquiring Person
has become such.

      "Subsidiary"  of any specified  Person shall mean any corporation or other
entity of which a majority  of the voting  power of the equity  securities  or a
majority of the equity interest is Beneficially  Owned,  directly or indirectly,
by such Person.

      "Trading Day", when used with respect to any securities,  shall mean a day
on which The Nasdaq  National Market is open for the transaction of business or,
if such  securities are not listed or admitted to trading on The Nasdaq National
Market, a day on which the principal national  securities exchange on which such
securities  are listed or  admitted  to trading is open for the  transaction  of
business  or, if such  securities  are not listed or  admitted to trading on any
national securities exchange, a Business Day.


                                      -9-
<PAGE>

                                   ARTICLE II

                                   THE RIGHTS

      2.1 Summary of Rights.  As soon as practicable  after the Record Time, the
Company will mail a copy of a letter to  shareholders  summarizing  the terms of
the Rights to each holder of record of Common  Stock as of the Record  Time,  at
such holder's address as shown by the records of the Company.

      2.2 Legend on Common Stock Certificates. Certificates for the Common Stock
issued after the Record Time but prior to the Separation Time shall evidence one
Right  for each  share of  Common  Stock  represented  thereby  and  shall  have
impressed on, printed on, written on or otherwise  affixed to them the following
legend:

             Until the  Separation  Time (as defined in the Rights
             Agreement  referred to below),  this certificate also
             evidences  and entitles the holder  hereof to certain
             Rights as set forth in a Rights  Agreement,  dated as
             of April 20,  2001 (as such may be amended  from time
             to time,  the  "Rights  Agreement"),  between  Anaren
             Microwave,  Inc. (the  "Company")  and American Stock
             Transfer & Trust Company,  as Rights Agent, the terms
             of which are hereby  incorporated herein by reference
             and a copy  of  which  is on  file  at the  principal
             executive  offices  of  the  Company.  Under  certain
             circumstances,  as set forth in the Rights Agreement,
             such Rights may be  terminated,  may be exchanged for
             shares of Common Stock or other  securities or assets
             of the Company,  may expire, may become void (if they
             are "Beneficially  Owned" by an "Acquiring Person" or
             an Affiliate or Associate thereof,  as such terms are
             defined in the Rights Agreement, or by any transferee
             of any  of the  foregoing)  or  may be  evidenced  by
             separate  certificates and may no longer be evidenced
             by this certificate. The Company will mail or arrange
             for the mailing of a copy of the Rights  Agreement to
             the holder of this certificate


                                      -10-
<PAGE>

             without  charge within five days after the receipt of
             a written request therefor.

Certificates representing shares of Common Stock that are issued and outstanding
at the Record  Time  shall  evidence  one Right for each  share of Common  Stock
evidenced thereby notwithstanding the absence of the foregoing legend.

      2.3 Exercise of Rights; Separation of Rights.

            (a)  Subject to  adjustment  as herein  set  forth,  each Right will
entitle the holder  thereof,  after the  Separation  Time, to purchase,  for the
Exercise Price, one share of Common Stock.

            (b) Until the  Separation  Time,  (i) no Right may be exercised  and
(ii) each Right will be evidenced by the certificate for the associated share of
Common Stock (together,  in the case of certificates  issued prior to the Record
Time,  with the letter mailed to the record holder  thereof  pursuant to Section
2.1) and will be  transferable  only together with, and will be transferred by a
transfer  (whether  with or without  such  letter)  of, such  associated  share.
Notwithstanding  any other provision of this  Agreement,  any Rights held by the
Company or any of its Subsidiaries shall be void.

            (c) After the Separation Time and prior to the Expiration  Time, the
Rights (i) may be exercised and (ii) will be transferable  independent of Common
Stock.  Promptly  following the  Separation  Time, the Rights Agent will mail to
each  holder  of  record  of Common  Stock as of the  Separation  Time,  at such
holder's  address as shown by the records of the  Company  (the  Company  hereby
agreeing  to  furnish  copies  of such  records  to the  Rights  Agent  for this
purpose),  (x) a certificate (a "Rights  Certificate") in substantially the form
of


                                      -11-
<PAGE>

Exhibit A hereto appropriately completed, representing the number of Rights held
by such holder at the Separation Time and having such marks of identification or
designation and such legends,  summaries or endorsements  printed thereon as the
Company may deem appropriate and as are not inconsistent  with the provisions of
this Agreement, or as may be required to comply with any law or with any rule or
regulation  made  pursuant  thereto or with any rule or  regulation of any stock
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform to usage, and (y) a disclosure statement describing the
Rights.

            (d) Subject to Section 5.10, Rights may be exercised on any Business
Day after the Separation  Time and prior to the Expiration Time by submitting to
the Rights Agent the Rights Certificate  evidencing such Rights with an Election
to Exercise (an  "Election to Exercise")  substantially  in the form attached to
the Rights  Certificate  duly  completed,  accompanied by payment in cash, or by
certified  check or money order  payable to the order of the  Company,  of a sum
equal to the Exercise Price  multiplied by the number of Rights being  exercised
and a sum sufficient to cover any transfer tax or charge which may be payable in
respect  of any  transfer  involved  in  the  transfer  or  delivery  of  Rights
Certificates  or  the  issuance  or  delivery  of  certificates  for  shares  or
depositary  receipts  (or both) in a name  other  than that of the holder of the
Rights being exercised.

            (e)  Upon  receipt  of a Rights  Certificate,  with an  Election  to
Exercise  accompanied  by  payment  as set forth in Section  2.3(d)  above,  and
subject to  Section  5.10,  the Rights  Agent  will  thereupon  promptly  (i)(A)
requisition from a transfer agent stock certificates for the number of shares to
be purchased (the Company hereby irrevocably  authorizing its


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<PAGE>

transfer  agents to comply  with all such  requisitions)  and (B) if the Company
elects  pursuant  to Section 5.5 hereof not to issue  certificates  representing
fractional  shares,  requisition  from the  depositary  selected  by the Company
depositary  receipts  representing  the  fractional  shares to be  purchased  or
requisition from the Company the amount of cash to be paid in lieu of fractional
shares in  accordance  with  Section  5.5 hereof and (ii) after  receipt of such
certificates,  depositary  receipts and/or cash, deliver the same to or upon the
order of the registered  holder of such Rights  Certificate,  registered (in the
case of  certificates  or  depositary  receipts) in such name or names as may be
designated by such holder.

            (f) In case the holder of any Rights  shall  exercise  less than all
the  Rights  evidenced  by  such  holder's  Rights  Certificate,  a  new  Rights
Certificate  evidencing the Rights  remaining  unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.

            (g) The Company  covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares  delivered upon exercise of
Rights  shall,  at the time of  delivery  of the  certificates  for such  shares
(subject to payment of the  Exercise  Price),  be duly and  validly  authorized,
executed,  issued and delivered and fully paid and nonassessable;  (ii) take all
such action as may be necessary to comply with any  applicable  requirements  of
the Securities Act of 1933 or the Securities Exchange Act of 1934, and the rules
and regulations thereunder, and any other applicable law, rule or regulation, in
connection  with the issuance of any shares upon  exercise of Rights;  (iii) use
its best  efforts  to cause all  shares  issued  upon  exercise  of Rights to be
listed,  upon  issuance,  on The  Nasdaq  National  Market  or on the  principal


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<PAGE>

national securities exchange on which shares of its Common Stock are then listed
or admitted for  trading;  and (iv) pay when due and payable any and all federal
and state  transfer  taxes and  charges  which may be  payable in respect of the
original issuance or delivery of the Rights Certificates or of any shares issued
upon the exercise of Rights,  provided that the Company shall not be required to
pay any  transfer  tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights  Certificates  or the issuance or
delivery of  certificates  for shares in a name other than that of the holder of
the Rights being transferred or exercised.

      2.4 Adjustments to Exercise Price; Number of Rights.

            (a) In the event the Company shall at any time after the Record Time
and prior to the  Separation  Time (i) declare or pay a dividend on Common Stock
payable in Common Stock,  (ii) subdivide the  outstanding  Common Stock or (iii)
combine the  outstanding  Common Stock into a smaller number of shares of Common
Stock, then (x) the Exercise Price in effect after such adjustment will be equal
to the Exercise Price in effect  immediately prior to such adjustment divided by
the number of shares of Common Stock (the  "Expansion  Factor") that a holder of
one share of Common Stock  immediately  prior to such  dividend,  subdivision or
combination  would hold thereafter as a result thereof,  and (y) each Right held
prior  to such  adjustment  will  become  that  number  of  Rights  equal to the
Expansion  Factor,  and the  adjusted  number  of  Rights  will be  deemed to be
distributed  among the shares of Common Stock with respect to which the original
Rights were  associated  (if they remain  outstanding)  and the shares issued in
respect of such dividend, subdivision or combination, so that each such share of


                                      -14-
<PAGE>

Common Stock will have  exactly one Right  associated  with it. Each  adjustment
made  pursuant to this  paragraph  shall be made as of the payment or  effective
date for the applicable dividend, subdivision or combination.

            In the event the Company shall at any time after the Record Time and
prior to the Separation  Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph,  each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share.

            (b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to a
regular  periodic  cash  dividend  or a dividend  paid  solely in Common  Stock)
whether by dividend,  in a reclassification or  recapitalization  (including any
such transaction  involving a merger,  consolidation or binding share exchange),
or otherwise,  the Company shall make such adjustments,  if any, in the Exercise
Price,  number of Rights and/or  securities or other property  purchasable  upon
exercise  of  Rights  as the  Board of  Directors  of the  Company,  in its sole
discretion,  may deem to be  appropriate  under  the  circumstances  in order to
adequately  protect the  interests of the holders of Rights  generally,  and the
Company and the Rights Agent shall amend this  Agreement as necessary to provide
for such adjustments.

            (c) Each  adjustment  to the  Exercise  Price made  pursuant to this
Section 2.4 shall be calculated  to the nearest cent.  Whenever an adjustment to
the Exercise Price


                                      -15-
<PAGE>

is made pursuant to this Section 2.4, the Company  shall (i) promptly  prepare a
certificate  setting forth such  adjustment  and a brief  statement of the facts
accounting  for such  adjustment,  (ii)  promptly file with the Rights Agent and
with each  transfer  agent for the Common Stock a copy of such  certificate  and
(iii) mail a brief summary thereof to each holder of Rights.

            (d)  Irrespective  of any  adjustment  or change  in the  securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter  issued may continue to express the securities so  purchasable  which
were expressed in the initial Rights Certificates issued hereunder.

      2.5 Date on Which  Exercise  is  Effective.  Each person in whose name any
certificate  for  shares is issued  upon the  exercise  of Rights  shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate  shall be dated, the date upon which the Rights
Certificate  evidencing  such  Rights was duly  surrendered  and  payment of the
Exercise Price for such Rights (and any applicable taxes and other  governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such  surrender  and  payment is a date upon which the stock
transfer  books of the Company are closed,  such person  shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next  succeeding  Business  Day on which  the  stock  transfer  books of the
Company are open.

      2.6 Execution,   Authentication,   Delivery   and   Dating   of   Rights
          Certificates.

            (a) The  Rights  Certificates  shall be  executed  on  behalf of the
Company by its President or one of its Vice Presidents, under its corporate seal
reproduced


                                      -16-
<PAGE>

thereon attested by its Secretary. The signature of any of these officers on the
Rights Certificates may be manual or facsimile.

            Rights  Certificates  bearing the manual or facsimile  signatures of
individuals  who were at any time the proper  officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such  offices  prior to the  countersignature  and  delivery of such Rights
Certificates.

            Promptly  after the  Company  learns  of the  Separation  Time,  the
Company  will notify the Rights Agent of such  Separation  Time and will deliver
Rights   Certificates   executed  by  the  Company  to  the  Rights   Agent  for
countersignature,  and the Rights Agent shall manually  countersign  and deliver
such Rights Certificates to the holders of the Rights pursuant to Section 2.3(c)
hereof.  No Rights  Certificate  shall be valid for any purpose  until  manually
countersigned by the Rights Agent.

            (b)  Each   Rights   Certificate   shall   be  dated   the  date  of
countersignature thereof.

      2.7 Registration, Registration of Transfer and Exchange.

            (a) After the  Separation  Time, the Company will cause to be kept a
register  (the  "Rights   Register")  in  which,   subject  to  such  reasonable
regulations as it may prescribe,  the Company will provide for the  registration
and transfer of Rights.  The Rights Agent is hereby appointed "Rights Registrar"
for  the  purpose  of  maintaining  the  Rights  Register  for the  Company  and
registering  Rights and transfers of Rights after the Separation  Time as herein
provided.  In the event  that the  Rights  Agent  shall  cease to be the  Rights
Registrar,  the


                                      -17-
<PAGE>

Rights  Agent  will  have the  right  to  examine  the  Rights  Register  at all
reasonable times after the Separation Time.

            After the  Separation  Time and prior to the Expiration  Time,  upon
surrender for  registration  of transfer or exchange of any Rights  Certificate,
and subject to the provisions of Section 2.7(c) below, the Company will execute,
and the Rights Agent will countersign and deliver,  in the name of the holder or
the designated  transferee or transferees,  as required pursuant to the holder's
instructions,  one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificate so surrendered.

            (b) All Rights issued upon any  registration of transfer or exchange
of Rights  Certificates shall be the valid obligations of the Company,  and such
Rights shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.

            (c)  Every  Rights  Certificate   surrendered  for  registration  of
transfer or exchange  shall be duly  endorsed,  or be  accompanied  by a written
instrument of transfer in form  satisfactory to the Company or the Rights Agent,
as the case  may be,  duly  executed  by the  holder  thereof  or such  holder's
attorney duly  authorized in writing.  As a condition to the issuance of any new
Rights  Certificate  under this Section 2.7, the Company may require the payment
of a sum  sufficient to cover any tax or other  governmental  charge that may be
imposed in relation thereto.

            (d) The Company  shall not be required to register  the  transfer or
exchange of any Rights  after the Rights have been  redeemed  under  Section 5.1
hereof.


                                      -18-
<PAGE>

      2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.

            (a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the  Expiration  Time,  the Company  shall execute and the Rights
Agent  shall   countersign  and  deliver  in  exchange  therefor  a  new  Rights
Certificate  evidencing the same number of Rights as did the Rights  Certificate
so surrendered.

            (b) If there shall be  delivered to the Company and the Rights Agent
prior  to  the  Expiration  Time  (i)  evidence  to  their  satisfaction  of the
destruction,  loss or theft of any Rights  Certificate and (ii) such security or
indemnity  as may be  required  by them to save  each of them  and any of  their
agents  harmless,  then,  in the  absence of notice to the Company or the Rights
Agent that such Rights  Certificate  has been acquired by a bona fide purchaser,
the  Company  shall  execute  and  upon  its  request  the  Rights  Agent  shall
countersign and deliver,  in lieu of any such  destroyed,  lost or stolen Rights
Certificate,  a new Rights  Certificate  evidencing the same number of Rights as
did the Rights Certificate so destroyed, lost or stolen.

            (c) As a condition  to the  issuance  of any new Rights  Certificate
under this Section 2.8, the Company may require the payment of a sum  sufficient
to cover any tax or other  governmental  charge  that may be imposed in relation
thereto and any other  expenses  (including  the fees and expenses of the Rights
Agent) connected therewith.

            (d) Every new Rights Certificate issued pursuant to this Section 2.8
in lieu of any destroyed,  lost or stolen Rights  Certificate  shall evidence an
original additional  contractual  obligation of the Company,  whether or not the
destroyed, lost or stolen Rights


                                      -19-
<PAGE>

Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately  with any and all
other Rights duly issued hereunder.

      2.9  Persons  Deemed  Owners.   Prior  to  due  presentment  of  a  Rights
Certificate  (or,  prior to the Separation  Time,  the  associated  Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights  Agent may deem and treat the person in whose
name such Rights  Certificate  (or,  prior to the Separation  Time,  such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes  whatsoever,  and neither the Company nor the
Rights  Agent shall be affected by any notice to the  contrary.  As used in this
Agreement,  unless the  context  otherwise  requires,  the term  "holder" of any
Rights  shall  mean the  registered  holder  of such  Rights  (or,  prior to the
Separation Time, the associated shares of Common Stock).

      2.10 Delivery and  Cancellation of Certificates.  All Rights  Certificates
surrendered  upon  exercise  or for  redemption,  registration  of  transfer  or
exchange  shall,  if surrendered  to any person other than the Rights Agent,  be
delivered to the Rights Agent and, in any case,  shall be promptly  cancelled by
the Rights  Agent.  The Company may at any time  deliver to the Rights Agent for
cancellation  any Rights  Certificates  previously  countersigned  and delivered
hereunder which the Company may have acquired in any manner whatsoever,  and all
Rights  Certificates  so  delivered  shall be promptly  cancelled  by the Rights
Agent. No Rights  Certificates  shall be countersigned in lieu of or in exchange
for any Rights  Certificates  cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights


                                      -20-
<PAGE>

Agent shall destroy all cancelled Rights  Certificates and deliver a certificate
of destruction to the Company.

      2.11 Agreement of Rights Holders.  Every holder of Rights by accepting the
same  consents  and agrees with the Company and the Rights  Agent and with every
other holder of Rights that:

            (a) prior to the Separation  Time,  each Right will be  transferable
only together  with,  and will be  transferred  by a transfer of, the associated
share of Common Stock;

            (b) after the  Separation  Time,  the  Rights  Certificates  will be
transferable only on the Rights Register as provided herein;

            (c) prior to due presentment of a Rights  Certificate  (or, prior to
the Separation Time, the associated  Common Stock  certificate) for registration
of transfer,  the Company,  the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights  Certificate
(or, prior to the Separation Time, the associated  Common Stock  certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes  whatsoever,  and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;

            (d)  Rights  beneficially  owned by certain  Persons  will under the
circumstances set forth in Section 3.1(b) become void; and

            (e) this Agreement may be  supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.


                                      -21-
<PAGE>

                                   ARTICLE III

         ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

      3.1 Flip-in.

            (a) In the event that prior to the  Expiration  Time a Flip-in  Date
shall occur,  the Company shall take such action as shall be necessary to ensure
and provide that,  except as provided  below,  each Right shall  constitute  the
right to purchase from the Company, upon exercise thereof in accordance with the
terms  hereof (but  subject to Section  5.10  hereof),  that number of shares of
Common  Stock having an aggregate  Market  Price on the Stock  Acquisition  Date
equal to twice the  Exercise  Price for an amount in cash equal to the  Exercise
Price (such right to be appropriately adjusted in order to protect the interests
of the  holders  of Rights  generally  in the event  that on or after such Stock
Acquisition  Date an event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the Common Stock).

            (b)  Notwithstanding  the  foregoing,  any  Rights  that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate  thereof or by any transferee,  direct or indirect,
of any of the  foregoing  shall  become  void  and any  holder  of  such  Rights
(including  transferees)  shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement.  If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the  certification  set forth at the end of the form of  assignment  or
notice of election  to exercise  and  provide  such  additional  evidence of the
identity of the  Beneficial  Owner and its


                                      -22-
<PAGE>

Affiliates and Associates (or former  Beneficial Owners and their Affiliates and
Associates) as the Company shall reasonably  request,  then the Company shall be
entitled to  conclusively  deem the Beneficial  Owner thereof to be an Acquiring
Person or an  Affiliate  or  Associate  thereof  or a  transferee  of any of the
foregoing and accordingly will deem the Rights evidenced  thereby to be void and
not transferable or exercisable.

            (c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of Common Stock,
elect to exchange all (but not less than all) the then outstanding Rights (which
shall not include  Rights that have become void  pursuant to the  provisions  of
Section  3.1(b)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted in order to protect the interests
of holders of Rights  generally in the event that after the  Separation  Time an
event of a type  analogous to any of the events  described in Section  2.4(a) or
(b) shall have occurred with respect to the Common Stock (such  exchange  ratio,
as adjusted from time to time,  being  hereinafter  referred to as the "Exchange
Ratio").

            Immediately upon the action of the Board of Directors of the Company
electing to  exchange  the  Rights,  without any further  action and without any
notice,  the right to  exercise  the Rights will  terminate  and each Right will
thereafter  represent  only the  right to  receive  a number of shares of Common
Stock equal to the  Exchange  Ratio.  Promptly  after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying  the steps to be taken to receive shares of Common Stock in exchange
for


                                      -23-
<PAGE>

Rights) to the Rights  Agent and the holders of the then  outstanding  Rights by
mailing such notice in accordance with Section 5.9.

            (d) In the event that there shall not be sufficient  treasury shares
or authorized  but unissued  shares of Common Stock of the Company to permit the
exercise or exchange in full of the Rights in accordance  with Section 3.1(a) or
(c),  the  Company  shall  either  (i) call a meeting  of  shareholders  seeking
approval to cause sufficient  additional shares to be authorized  (provided that
if such  approval is not obtained the Company will take the action  specified in
clause (ii) of this  sentence) or (ii) take such action as shall be necessary to
ensure and provide, to the extent permitted by applicable law and any agreements
or instruments in effect on the Stock  Acquisition  Date to which it is a party,
that each Right shall  thereafter  constitute  the right to receive,  (x) at the
Company's  option,  either (A) in return for the Exercise Price,  debt or equity
securities  (including  Preferred  Stock)  or  other  assets  (or a  combination
thereof)  having a fair value equal to twice the Exercise  Price, or (B) without
payment of consideration  (except as otherwise required by applicable law), debt
or  equity  securities  (including  Preferred  Stock)  or  other  assets  (or  a
combination  thereof) having a fair value equal to the Exercise Price, or (y) if
the  Board of  Directors  of the  Company  elects  to  exchange  the  Rights  in
accordance with Section 3.1(c), debt or equity securities  (including  Preferred
Stock) or other assets (or a combination  thereof)  having a fair value equal to
the product of the Market  Price of a share of Common  Stock on the Flip-in Date
times the Exchange  Ratio in effect on the Flip-in  Date,  where in any case set
forth in (x) or (y) above the fair  value of such debt or equity


                                      -24-
<PAGE>

securities  or other assets shall be as determined in good faith by the Board of
Directors  of the  Company,  after  consultation  with a  nationally  recognized
investment banking firm.

      3.2 Flip-over.

            (a) Prior to the  Expiration  Time, the Company shall not enter into
any agreement with an Acquiring Person with respect to,  consummate or permit to
occur any Flip-over  Transaction or Event unless and until it shall have entered
into a  supplemental  agreement  with  the  Person  engaging  in such  Flip-over
Transaction or Event (the "Flip-over Entity"), for the benefit of the holders of
the Rights,  providing,  that upon  consummation  or occurrence of the Flip-over
Transaction  or Event (i) each Right shall  thereafter  constitute  the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof,  that number of shares of Flip-over Stock of the Flip-over  Entity
having an aggregate  Market Price on the date of  consummation  or occurrence of
such  Flip-over  Transaction  or Event equal to twice the Exercise  Price for an
amount in cash  equal to the  Exercise  Price  (such  right to be  appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of  consummation or occurrence an event of a type
analogous  to any of the events  described  in Section  2.4(a) or (b) shall have
occurred  with respect to the  Flip-over  Stock) and (ii) the  Flip-over  Entity
shall  thereafter be liable for, and shall assume,  by virtue of such  Flip-over
Transaction or Event and such  supplemental  agreement,  all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.


                                      -25-
<PAGE>

            (b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in  connection  therewith,  the Company shall not
enter into any  agreement  with  respect to,  consummate  or permit to occur any
Flip-over  Transaction  or Event if at the time  thereof  there are any  rights,
warrants or  securities  outstanding  or any other  arrangements,  agreements or
instruments  which  would  eliminate  or  otherwise  diminish in any respect the
benefits  intended to be afforded  by this  Rights  Agreement  to the holders of
Rights upon consummation of such transaction.

                                   ARTICLE IV

                                THE RIGHTS AGENT

      4.1 General.

            (a) The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions  hereof,  and the Rights
Agent hereby accepts such  appointment.  The Company agrees to pay to the Rights
Agent  reasonable  compensation  for all services  rendered by it hereunder and,
from time to time, on demand of the Rights Agent,  its  reasonable  expenses and
counsel  fees  and  other  disbursements  incurred  in  the  administration  and
execution  of this  Agreement  and the exercise  and  performance  of its duties
hereunder.  The Company  also agrees to  indemnify  the Rights Agent for, and to
hold it harmless  against,  any loss,  liability,  or expense,  incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection  with the  acceptance
and  administration  of this  Agreement,  including  the costs and  expenses  of
defending against any claim of liability.


                                      -26-
<PAGE>

            (b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action  taken,  suffered or omitted by it in connection
with its  administration  of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate,  certificate
or other securities of the Company,  instrument of assignment or transfer, power
of  attorney,  endorsement,   affidavit,  letter,  notice,  direction,  consent,
certificate,  statement, or other paper or document believed by it to be genuine
and to be signed,  executed and, where necessary,  verified or acknowledged,  by
the proper person or persons.

      4.2 Merger or Consolidation or Change of Name of Rights Agent.

            (a) Any  corporation  into which the Rights  Agent or any  successor
Rights  Agent  may be  merged  or  with  which  it may be  consolidated,  or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor  Rights Agent is a party, or any corporation  succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
will be the  successor  to the Rights  Agent  under this  Agreement  without the
execution  or filing of any paper or any  further  act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 4.4 hereof.  In case
at the time such  successor  Rights Agent succeeds to the agency created by this
Agreement  any of the  Rights  Certificates  have  been  countersigned  but  not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights  Certificates so countersigned;
and in  case  at  that  time  any of  the  Rights  Certificates  have  not  been


                                      -27-
<PAGE>

countersigned,   any  successor   Rights  Agent  may  countersign   such  Rights
Certificates  either in the name of the predecessor  Rights Agent or in the name
of the successor  Rights Agent;  and in all such cases such Rights  Certificates
will  have  the full  force  provided  in the  Rights  Certificates  and in this
Agreement.

            (b) In case at any time the name of the Rights  Agent is changed and
at such time any of the Rights  Certificates  shall have been  countersigned but
not delivered,  the Rights Agent may adopt the countersignature  under its prior
name and deliver Rights Certificates so countersigned;  and in case at that time
any of the Rights  Certificates  shall not have been  countersigned,  the Rights
Agent may countersign  such Rights  Certificates  either in its prior name or in
its changed name; and in all such cases such Rights  Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.

      4.3 Duties of Rights  Agent.  The Rights Agent  undertakes  the duties and
obligations  imposed by this Agreement upon the following  terms and conditions,
by all of which the  Company and the  holders of Rights  Certificates,  by their
acceptance thereof, shall be bound:

            (a) The Rights  Agent may  consult  with legal  counsel  (who may be
legal counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

            (b) Whenever in the  performance  of its duties under this Agreement
the Rights  Agent deems it  necessary  or  desirable  that any fact or matter be
proved or  established  by the Company  prior to taking or suffering  any action
hereunder,  such fact or matter  (unless


                                      -28-
<PAGE>

other  evidence in respect  thereof be herein  specifically  prescribed)  may be
deemed to be conclusively  proved and  established by a certificate  signed by a
person  believed by the Rights Agent to be the  President or any Vice  President
and by the Treasurer or the Secretary of the Company and delivered to the Rights
Agent; and such  certificate will be full  authorization to the Rights Agent for
any action  taken or suffered in good faith by it under the  provisions  of this
Agreement in reliance upon such certificate.

            (c) The  Rights  Agent  will be  liable  hereunder  only for its own
negligence, bad faith or willful misconduct.

            (d) The  Rights  Agent will not be liable for or by reason of any of
the  statements  of fact or  recitals  contained  in  this  Agreement  or in the
certificates  for securities  purchasable  upon exercise of Rights or the Rights
Certificates (except its countersignature  thereof) or be required to verify the
same,  but all such  statements and recitals are and will be deemed to have been
made by the Company only.

            (e) The Rights Agent will not be under any responsibility in respect
of the validity of this  Agreement or the execution and delivery  hereof (except
the due authorization,  execution and delivery hereof by the Rights Agent) or in
respect  of  the  validity  or  execution  of  any  certificate  for  securities
purchasable  upon  exercise  of  Rights  or  Rights   Certificate   (except  its
countersignature  thereof);  nor will it be  responsible  for any  breach by the
Company of any  covenant or  condition  contained  in this  Agreement  or in any
Rights  Certificate;   nor  will  it  be  responsible  for  any  change  in  the
exercisability  of the Rights  (including  the Rights  becoming void pursuant to
Section  3.1(b)  hereof) or any  adjustment  required  under the  provisions  of


                                      -29-
<PAGE>

Section 2.4, 3.1 or 3.2 hereof or responsible  for the manner,  method or amount
of any such adjustment or the  ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the  certificate  contemplated  by Section  2.4  describing  any such
adjustment);   nor  will  it  by  any  act  hereunder  be  deemed  to  make  any
representation  or  warranty  as to  the  authorization  or  reservation  of any
securities  purchasable  upon  exercise of Rights or any Rights or as to whether
any securities  purchasable  upon exercise of Rights will, when issued,  be duly
and  validly  authorized,  executed,  issued  and  delivered  and fully paid and
nonassessable.

            (f) The Company  agrees that it will perform,  execute,  acknowledge
and deliver or cause to be performed,  executed,  acknowledged and delivered all
such further and other acts,  instruments  and  assurances as may  reasonably be
required by the Rights Agent for the carrying  out or  performing  by the Rights
Agent of the provisions of this Agreement.

            (g) The Rights  Agent is hereby  authorized  and  directed to accept
instructions  with respect to the  performance of its duties  hereunder from any
person believed by the Rights Agent to be the President or any Vice President or
the Secretary or the Treasurer of the Company,  and to apply to such persons for
advice or instructions in connection with its duties, and it shall not be liable
for any  action  taken  or  suffered  by it in good  faith  in  accordance  with
instructions of any such person.

            (h) The  Rights  Agent and any  stockholder,  director,  officer  or
employee of the Rights Agent may buy,  sell or deal in Common  Stock,  Rights or
other  securities  of  the  Company  or  become  pecuniarily  interested  in any
transaction  in which the Company may


                                      -30-
<PAGE>

be interested, or contract with or lend money to the Company or otherwise act as
fully and  freely  as though it were not  Rights  Agent  under  this  Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.

            (i) The Rights  Agent may execute and  exercise any of the rights or
powers hereby vested in it or perform any duty hereunder  either itself or by or
through its attorneys or agents,  and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the  Company  resulting  from any such  act,  default,
neglect or misconduct,  provided  reasonable care was exercised in the selection
and continued employment thereof.

      4.4 Change of Rights Agent.  The Rights Agent may resign and be discharged
from its duties under this  Agreement upon 90 days notice (or such lesser notice
as is  acceptable  to the Company) in writing  mailed to the Company and to each
transfer  agent of Common  Stock by  registered  or certified  mail,  and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the
Rights  Agent upon 30 days notice in writing,  mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or certified  mail, and to
the holders of the Rights in  accordance  with  Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the Company
will appoint a successor to the Rights Agent.  If the Company fails to make such
appointment  within a period of 30 days after such  removal or after it has been
notified  in writing of such  resignation  or  incapacity  by the  resigning  or
incapacitated  Rights Agent or by the holder of any Rights  (which holder shall,
with such notice,  submit such holder's Rights Certificate for inspection by the
Company),  then the


                                      -31-
<PAGE>

holder of any Rights may apply to any court of  competent  jurisdiction  for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court,  shall be a  corporation  organized and doing
business under the laws of the United States, the State of New York or the State
of Delaware,  in good standing,  having its principal office in the State of New
York or the State of Delaware,  which is authorized  under such laws to exercise
the powers of the Rights Agent  contemplated by this Agreement and is subject to
supervision or  examination  by federal or state  authority and which has at the
time of its  appointment  as Rights  Agent a combined  capital and surplus of at
least $50,000,000.  After appointment, the successor Rights Agent will be vested
with the same  powers,  rights,  duties and  responsibilities  as if it had been
originally  named  as  Rights  Agent  without  further  act  or  deed;  but  the
predecessor  Rights  Agent shall  deliver and transfer to the  successor  Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance,  conveyance, act or deed necessary for the purpose. Not later
than the effective  date of any such  appointment,  the Company will file notice
thereof in writing with the predecessor  Rights Agent and each transfer agent of
the Common  Stock,  and mail a notice  thereof in writing to the  holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.


                                      -32-
<PAGE>

                                    ARTICLE V

                                  MISCELLANEOUS

      5.1 Redemption.

            (a) The Board of Directors of the Company may, at its option, at any
time prior to the Flip-in Date,  elect to redeem all (but not less than all) the
then outstanding Rights at the Redemption Price.

            (b)  Immediately  upon the action of the Board of  Directors  of the
Company  electing to redeem the Rights (or,  if the  resolution  of the Board of
Directors  electing to redeem the Rights states that the redemption  will not be
effective  until the  occurrence of a specified  future time or event,  upon the
occurrence of such future time or event), without any further action and without
any notice,  the right to exercise the Rights will terminate and each Right will
thereafter  represent  only the right to receive the  Redemption  Price in cash.
Promptly  after the Rights are  redeemed,  the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice in accordance with Section 5.9.

      5.2 Expiration. No Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time,  except,  if the Rights are exchanged or
redeemed, as provided in Section 3.1(c) or 5.1 hereof.

      5.3  Issuance  of  New  Rights  Certificates.  Notwithstanding  any of the
provisions of this Agreement or of the Rights to the contrary,  the Company may,
at its option,  issue new Rights Certificates  evidencing Rights in such form as
may be approved by its Board of


                                      -33-
<PAGE>

Directors to reflect any  adjustment or change in the number or kind or class of
shares of stock  purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.

      5.4 Supplements and Amendments.  The Company and the Rights Agent may from
time to time  supplement  or amend this  Agreement  without the  approval of any
holders of Rights (i) in any respect  prior to the  Flip-in  Date (other than to
change the Exercise Price, the Redemption  Price or the Expiration Time,  except
as contemplated  elsewhere herein), (ii) to make any changes following the close
of  business  on the  Flip-in  Date  which the  Company  may deem  necessary  or
desirable and which shall not materially  adversely  affect the interests of the
holders  of  Rights  generally  or (iii) in  order to cure any  ambiguity  or to
correct or supplement any provision  contained  herein which may be inconsistent
with any other provisions herein or otherwise  defective.  The Rights Agent will
duly execute and deliver any  supplement  or amendment  hereto  requested by the
Company which satisfies the terms of the preceding sentence.

      5.5 Fractional  Shares.  If the Company  elects not to issue  certificates
representing  fractional  shares upon exercise of Rights,  the Company shall, in
lieu thereof,  (a) evidence such fractional shares by depositary receipts issued
pursuant to an  appropriate  agreement  between  the  Company  and a  depositary
selected by it, provided that such agreement shall provide that each holder of a
depositary  receipt shall have all of the rights,  privileges and preferences to
which he would be entitled as a beneficial  owner of such  fractional  share, or
(b) pay to the registered  holder of such Rights the same fraction of the Market
Price of one  share of the  stock  issuable  upon  such  exercise  on the day of
exercise.


                                      -34-
<PAGE>

      5.6 Rights of Action.  Subject to the terms of this  Agreement,  rights of
action in respect of this  Agreement,  other than rights of action vested solely
in the Rights Agent, are vested in the respective holders of the Rights; and any
holder of any Rights,  without the consent of the Rights  Agent or of the holder
of any other Rights,  may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights,  enforce,  and may institute
and maintain any suit, action or proceeding  against the Company to enforce,  or
otherwise  act in respect of, such  holder's  right to  exercise  such  holder's
Rights in the manner  provided in such holder's  Rights  Certificate and in this
Agreement.  Without  limiting the  foregoing  or any  remedies  available to the
holders of Rights,  it is specifically  acknowledged  that the holders of Rights
would not have an adequate  remedy at law for any breach of this  Agreement  and
will  be  entitled  to  specific  performance  of  the  obligations  under,  and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.

      5.7 Holder of Rights Not Deemed a Shareholder.  No holder, as such, of any
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other  securities  which may at any time be issuable
on the exercise of such Rights,  nor shall anything  contained  herein or in any
Rights  Certificate  be  construed  to confer upon the holder of any Rights,  as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter  submitted to  shareholders  at any
meeting thereof,  or to give or withhold consent to any corporate  action, or to
receive notice of meetings or other actions  affecting  shareholders  (except as
provided in Section 5.8 hereof), or to receive


                                      -35-
<PAGE>

dividends or  subscription  rights,  or otherwise,  until such Rights shall have
been exercised in accordance with the provisions hereof.

      5.8 Notice of Proposed  Actions.  In case the Company  shall propose after
the Separation Time and prior to the Expiration Time (i) to effect or permit (in
cases where the Company's permission is required) occurrence of any Flip-in Date
or Flip-over Transaction or Event or (ii) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 5.9 hereof,  a notice of such
proposed action,  which shall specify the Flip-in Date or the date on which such
Flip-over Transaction or Event,  liquidation,  dissolution,  or winding up is to
take place, and such notice shall be so given at least 20 Business Days prior to
the date of the taking of such proposed action.

      5.9 Notices.  Notices or demands  authorized or required by this Agreement
to be given or made by the Rights  Agent or by the holder of any Rights to or on
the  Company  shall  be  sufficiently  given  or  made if  delivered  or sent by
first-class mail, postage prepaid,  addressed (until another address is filed in
writing with the Rights Agent) as follows:

                         Anaren Microwave, Inc.
                         6635 Kirkville Road
                         East Syracuse, New York  13057
                         Attention:  Corporate Secretary

Any notice or demand  authorized  or required by this  Agreement  to be given or
made by the  Company or by the  holder of any  Rights to or on the Rights  Agent
shall be  sufficiently  given or made if delivered or sent by first-class  mail,
postage  prepaid,  addressed (until another address is filed in writing with the
Company) as follows:


                                      -36-
<PAGE>

                     American Stock Transfer & Trust Company
                                 59 Maiden Lane
                            New York, New York 10038

Notices or demands  authorized or required by this Agreement to be given or made
by the  Company or the Rights  Agent to or on the holder of any Rights  shall be
sufficiently  given or made if delivered or sent by  first-class  mail,  postage
prepaid,  addressed  to such  holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock.  Any notice which
is mailed in the manner herein  provided  shall be deemed given,  whether or not
the holder receives the notice.

      5.10  Suspension  of  Exercisability.  To  the  extent  that  the  Company
determines  in good faith that some  action  need be taken  pursuant  to Section
3.1(d) or to comply  with  federal or state  securities  laws,  the  Company may
suspend the  exercisability of the Rights for a period of up to ninety (90) days
following the date of the occurrence of the Separation  Time or the Flip-in Date
in order to take such action or comply with such laws.  In the event of any such
suspension,  the  Company  shall  issue  as  promptly  as  practicable  a public
announcement  stating that the exercisability of the Rights has been temporarily
suspended.

      5.11 Costs of  Enforcement.  The Company agrees that if the Company or any
other Person the  securities  of which are  purchasable  upon exercise of Rights
fails to fulfill any of its  obligations  pursuant to this  Agreement,  then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses  (including  legal fees)  incurred by such holder in actions to enforce
his rights pursuant to any Rights or this Agreement.


                                      -37-
<PAGE>

      5.12 Successors.  All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and benefit  their
respective successors and assigns hereunder.

      5.13  Benefits  of this  Agreement.  Nothing  in this  Agreement  shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable  right,  remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.

      5.14  Descriptive   Headings.   Descriptive  headings  appear  herein  for
convenience  only and shall not control or affect the meaning or construction of
any of the provisions hereof.

      5.15 Governing Law. This Agreement and each Right issued  hereunder  shall
be deemed to be a contract  made under the laws of the State of New York and for
all purposes  shall be governed by and construed in accordance  with the laws of
such state applicable to contracts to be made and performed entirely within such
state.

      5.16  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and all such counterparts shall together constitute but one and
the same instrument.

      5.17  Severability.  If any term or  provision  hereof or the  application
thereof to any circumstance  shall, in any  jurisdiction  and to any extent,  be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction  to the  extent  of such  invalidity


                                      -38-
<PAGE>

or  unenforceability   without  invalidating  or  rendering   unenforceable  the
remaining  terms  and  provisions  hereof  or the  application  of such  term or
provision  to  circumstances  other than those as to which it is held invalid or
unenforceable.

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
duly executed as of the date first above written.

                                ANAREN MICROWAVE, INC.

                                By: /s/ Lawrence A. Sala
                                    -----------------------------------------
                                         Name:  Lawrence A. Sala
                                         Title:    President and CEO

                                AMERICAN STOCK TRANSFER & TRUST COMPANY

                                By: /s/ Herbert J. Lemmer
                                    -----------------------------------------
                                         Name:  Herbert J. Lemmer
                                         Title: Vice President


                                      -39-
<PAGE>

                                                                       EXHIBIT A

                                       [Form of Common Stock Rights Certificate]

Certificate No. W-                                        _______________ Rights

            THE RIGHTS ARE SUBJECT TO  REDEMPTION OR MANDATORY
            EXCHANGE,  AT THE  OPTION OF THE  COMPANY,  ON THE
            TERMS SET FORTH IN THE  RIGHTS  AGREEMENT.  RIGHTS
            BENEFICIALLY   OWNED  BY   ACQUIRING   PERSONS  OR
            AFFILIATES  OR  ASSOCIATES  THEREOF (AS SUCH TERMS
            ARE   DEFINED   IN  THE   RIGHTS   AGREEMENT)   OR
            TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.

                               Rights Certificate

                             ANAREN MICROWAVE, INC.

            This  certifies  that  ____________________________,  or  registered
assigns,  is the registered holder of the number of Rights set forth above, each
of  which  entitles  the  registered  holder  thereof,  subject  to  the  terms,
provisions and conditions of the Shareholder Protection Rights Agreement,  dated
as of April 20,  2001 (as such may be  amended  from time to time,  the  "Rights
Agreement"),  between  Anaren  Microwave,  Inc.,  a New  York  corporation  (the
"Company"),  and American Stock  Transfer & Trust Company,  as Rights Agent (the
"Rights  Agent," which term shall  include any successor  Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the Separation
Time (as such term is defined in the Rights Agreement) and prior to the close of
business on April 27, 2011, one fully paid share of Common Stock, par value $.01
per share (the  "Common  Stock"),  of the  Company  (subject  to  adjustment  as
provided in the Rights  Agreement) at the Exercise Price referred to below, upon
presentation and surrender of this Rights  Certificate with the Form of Election
to Exercise  duly  executed at the  principal  office of the Rights  Agent.  The
Exercise  Price  shall  initially  be $170.00  per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.

            In certain  circumstances  described  in the Rights  Agreement,  the
Rights  evidenced  hereby may entitle the registered  holder thereof to purchase
securities  of an entity other than the Company or  securities  or assets of the
Company other than Common Stock, all as provided in the Rights Agreement.


                                      A-1
<PAGE>

            This Rights  Certificate is subject to all of the terms,  provisions
and conditions of the Rights Agreement,  which terms,  provisions and conditions
are hereby  incorporated herein by reference and made a part hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Company and the holders of the Rights Certificates.  Copies of
the Rights  Agreement are on file at the principal office of the Company and are
available without cost upon written request.

            This Rights Certificate,  with or without other Rights Certificates,
upon  surrender at the office of the Rights Agent  designated  for such purpose,
may be exchanged for another Rights  Certificate or Rights  Certificates of like
tenor and date  evidencing an aggregate  number of Rights equal to the aggregate
number of Rights  evidenced  by the Rights  Certificate  or Rights  Certificates
surrendered.  If this  Rights  Certificate  shall  be  exercised  in  part,  the
registered holder shall be entitled to receive,  upon surrender hereof,  another
Rights  Certificate  or  Rights  Certificates  for the type and  number of whole
Rights not exercised.

            Subject  to the  provisions  of the  Rights  Agreement,  the  Rights
evidenced by this  Certificate  may be (a) redeemed by the Company under certain
circumstances  at its  option at a  redemption  price of $0.001 per Right or (b)
exchanged by the Company under certain circumstances at its option for one share
of Common Stock per Right (or, in certain cases,  other  securities or assets of
the Company),  subject in each case to adjustment in certain  events as provided
in the Rights Agreement.

            No holder of this Rights Certificate,  as such, shall be entitled to
vote or  receive  dividends  or be  deemed  for any  purpose  the  holder of any
securities which may at any time be issuable on the exercise  hereof,  nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder  hereof,  as such, any of the rights of a shareholder or any right to
vote for the election of directors or upon any matter  submitted to shareholders
at any meeting thereof,  or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights  Agreement),  or to receive  dividends or subscription
rights,  or  otherwise,  until the Rights  evidenced by this Rights  Certificate
shall have been exercised as provided in the Rights Agreement.


                                      A-2
<PAGE>

            This Rights  Certificate  shall not be valid or  obligatory  for any
purpose until it shall have been countersigned by the Rights Agent.

            WITNESS  the  facsimile  signature  of the  proper  officers  of the
Company and its corporate seal.

Date:_____________________

ATTEST:                                     ANAREN  MICROWAVE, INC.

__________________________                  By___________________________
Secretary

Countersigned:

____________________________________
(Rights Agent)

By__________________________________

         Authorized Signature


                                      A-3
<PAGE>

            [Form of Reverse Side of Common Stock Rights Certificate]

                               FORM OF ASSIGNMENT

             (To be executed by the registered holder if such holder
                  desires to transfer the Rights Certificate.)

         FOR VALUE RECEIVED ______________________________________ hereby sells,

assigns and transfers unto _____________________________________________________
                               (Please print name and address of transferee)

this Rights  Certificate,  together with all right,  title and interest therein,
and      does      hereby      irrevocably      constitute      and      appoint
______________________________   Attorney,   to  transfer   the  within   Rights
Certificate  on the  books  of the  within-named  Company,  with  full  power of
substitution.

Dated:  _______________, _____

Signature Guaranteed:                 ____________________________________
                                      Signature

                                      (Signature  must  correspond  to  name  as
                                      written  upon  the  face  of  this  Rights
                                      Certificate in every  particular,  without
                                      alteration  or  enlargement  or any change
                                      whatsoever)

            Signatures  must be  guaranteed  by a  member  firm of a  registered
national securities exchange, a member of the National Association of Securities
Dealers,  Inc.,  or a  commercial  bank or trust  company  having  an  office or
correspondent in the United States.


                                      A-4
<PAGE>

                            (To be completed if true)

The undersigned hereby represents,  for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the  knowledge of the  undersigned,  have never been,  Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).

                                    ____________________________________
                                    Signature

                                     NOTICE

In the event the  certification  set forth above is not  completed in connection
with a purported  assignment,  the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an  Affiliate  or Associate  thereof (as defined in the Rights  Agreement)  or a
transferee  of any  of the  foregoing  and  accordingly  will  deem  the  Rights
evidenced  by such  Rights  Certificate  to be  void  and  not  transferable  or
exercisable.


                                      A-5
<PAGE>

            [To be attached to each Common Stock Rights Certificate]

                          FORM OF ELECTION TO EXERCISE

                      (To be executed if holder desires to
                        exercise the Rights Certificate.)

TO:   ANAREN MICROWAVE, INC.

            The   undersigned    hereby    irrevocably    elects   to   exercise
_______________  whole Common Stock Rights  represented  by the attached  Rights
Certificate to purchase the shares of Common Stock issuable upon the exercise of
such Common  Stock  Rights and  requests  that  certificates  for such shares be
issued in the name of:

             ________________________________________
             Address:________________________________
             ________________________________________
             Social Security or Other Taxpayer
             Identification Number:__________________

            If such number of Common  Stock  Rights  shall not be all the Common
Stock Rights evidenced by this Rights Certificate,  a new Rights Certificate for
the balance of such Common Stock Rights shall be  registered  in the name of and
delivered to:

             ________________________________________
             Address:________________________________
             ________________________________________
             Social Security or Other Taxpayer
             Identification Number:__________________

Dated: ________________, ______
Signature Guaranteed:                 ____________________________________
                                      Signature
                                      (Signature  must  correspond  to  name  as
                                      written  upon  the  face  of  this  Rights
                                      Certificate in every  particular,  without
                                      alteration  or  enlargement  or any change
                                      whatsoever)


                                       A-6
<PAGE>

Signatures  must  be  guaranteed  by a  member  firm  of a  registered  national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

                            (To be completed if true)

The undersigned hereby represents,  for the benefit of all holders of Rights and
shares of  Common  Stock,  that the  Rights  evidenced  by the  enclosed  Rights
Certificate are not, and, to the knowledge of the undersigned,  have never been,
Beneficially  Owned by an Acquiring Person or an Affiliate or Associate  thereof
(as defined in the Rights Agreement).

                                    ____________________________
                                    Signature

                                     NOTICE

In the event the  certification  set forth above is not  completed in connection
with a purported  exercise,  the Company will deem the  Beneficial  Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate thereof (as defined in the Rights Agreement) or a transferee of any
of the foregoing and accordingly  will deem the Rights  evidenced by such Rights
Certificate to be void and not transferable or exercisable.